Frankfurt could run out of offices as banks scramble for space post-Brexit

Reuters/Kai Pfaffenbach
LONDON — Germany's financial centre, Frankfurt, could run out of office space as the movement of banks looking to set up new EU headquarters outside London after Brexit puts a squeeze on the city's commercial property sector.

That's the warning given by the real estate brokerage unit of French banking giant BNP Paribas in a report circulated on Thursday.

"For Frankfurt, where the vacancy rate has slipped below the 10 % level, there is a growing shortage of large-unit premises in the central areas," the release from BNP Paribas Real Estate said.

"In view of the anticipated increase in demand by banks in connection with Brexit, this shortage looks set to intensify in the months ahead."

Banks from across the world are currently assessing their options when it comes to Britain's impending exit from the European Union. Most lenders from Japan and the USA currently have their European bases in London, but are expected to shift those operations to continental Europe to maintain an EU presence after Brexit.

So far Frankfurt is one of the biggest beneficiaries, with three major Japanese banks, Nomura, Daiwa, and Sumitomo Mitsui all announcing new EU HQs in the city. American giant Citigroup also confirmed this week that it will send some staff to Frankfurt, while Morgan Stanley is also expected to move staff.